EXHIBIT 6.1
SHARE EXCHANGE AGREEMENT
MADE EFFECTIVE AS OF THE 13th DAY OF MARCH 2000 (the "Effective Date"),
BETWEEN: XXXXXXXXXX.XXX SYSTEMS INC. a company incorporated under the laws
of the Province of British Columbia and having an office at 1100
- 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
("MindfulEye");
AND: XXX XXXXXX ("Xx. Xxxxxx"), of 000 - 0000 Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
XXXX CUSOLLE ("Mr. Cusolle"), of 000 - 0000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
XXX XXXXXXXX ("Xx. Xxxxxxxx"), of 000 - 0000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
XXXXXX XXXX ("Xx. Xxxx"), of 000 Xxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
XXXXX XXXXXXX ("Xx. Xxxxxxx"), of 000 - 0000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0; and
XXXXXXXX CAPITAL CORP. ("Xxxxxxxx Capital"), a company
incorporated under the laws of the Province of British Columbia
and having an office at 1304 - 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(collectively, the "Shareholders" and individually, a
"Shareholder");
AND: RABATCO INC., a Nevada corporation having an office at Suite 333
- 2838 Xxxxxx Xxx Xxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx, X.X.X.
00000-0000
("RABATCO");
WHEREAS:
The authorized share capital of MindfulEye consists of 100,100,000 shares
divided into 100,000 common shares of which 213 are issued and outstanding (the
"MindfulEye Shares") and 100,000,000 preferred shares, none of which are issued
or outstanding, with each Shareholder legally and beneficially owning the
following number of MindfulEye Shares:
Shareholder Number of MindfulEye Shares Held
----------- --------------------------------
Xx. Xxxxxx 38
Mr. Cusolle 38
Xx. Xxxxxxxx 38
Xx. Xxxx 38
Xx. Xxxxxxx 8
Xxxxxxxx Capital 53
----
Total 213.
The Shareholders and Rabatco have agreed to exchange the MindfulEye Shares for
common shares of Rabatco, on the terms and conditions described in this
Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants
and agreements herein contained, the parties hereto do covenant and agree (the
"Agreement") as follows:
1. SHARE EXCHANGE
1.1 Subject to the terms and conditions of this Agreement, the Shareholders
shall transfer all of the MindfulEye Shares to Rabatco in exchange for 6,910,000
common shares of Rabatco (the "Rabatco Shares") issued at a deemed price per
share of US$0.01, and US$150,000 (the "Cash Portion").
1.2 Except as expressly noted otherwise, the transactions contemplated under
this Agreement shall be completed (the "Completion") at the offices of Rabatco's
solicitors, Messrs. Xxxxxxx & Xxxxxx, 2100 - 1111 West Georgia Street,
Vancouver, British Columbia, or at such other place as may be agreed between the
parties, at 10:00 o'clock a.m. local time in Vancouver, B.C., or at such other
time as may be agreed between the parties, (the "Time of Closing") on 20 March,
2000, or on such other date as may be agreed between the parties, (the "Closing
Date").
1.3 The Cash Portion shall be paid to the Shareholders as they may jointly
direct in writing as follows:
(a) US$50,000 on the Closing Date, by way of wire transfer, bank order,
certified cheque or solicitor's trust cheque; and
(b) US$100,000, without interest, upon successful launch of an internet
website to operate the business of MindfulEye to the satisfaction of
the board of directors of Rabatco; to be secured by a promissory note
(the "Promissory Note") issued by Rabatco on the Closing Date.
1.4 Prior to the Completion, Rabatco will undertake a financing (the
"Financing") to raise not less than US$2,257,500 for investment into MindfulEye
by issuing not more than 1,075,000 units at a price not less than US$2.10 per
unit, with each unit consisting of one common share of Rabatco and one-half
warrant. The total number of Rabatco common shares to be issued on completion of
the Financing is not to exceed 1,075,000 (the "Financing Shares"). In addition,
each holder of two one-half warrants would be entitle to acquire one further
common share of Rabatco at a price not less than US$2.10 in the first year after
issuance of the warrants, or for a price not less than US$2.50 in the second
year after issuance of the warrants. After two years, the warrants would expire
if not exercised.
2. CONDITIONS PRECEDENT
2.1 Rabatco's obligations to carry out the terms of this Agreement and to
complete its transactions contemplated under this Agreement are subject to the
fulfilment to the satisfaction of Rabatco of each of the following conditions
that:
(a) at the Time of Closing, the solicitors for MindfulEye shall provide an
opinion dated as of the Closing Date, substantially in the form of
Schedule A to this Agreement (the "MindfulEye Solicitor Opinion");
(b) at the Time of Closing, each of Mr. Cusolle, Xx. Xxxxxx, Xx. Xxxxxxxx
and Xx. Xxxx shall enter into employment agreements with MindfulEye
(the "Employment Agreements") in the form of Schedule L to this
Agreement completed to reflect their
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current compensation arrangements as shown in Schedule E to this
Agreement with such changes or additional benefits as Rabatco may
approve;
(c) as of the Time of Closing, each of the Shareholders and MindfulEye
(collectively, the "MindfulEye Group") shall have complied with all of
their respective covenants and agreements contained in this Agreement;
and
(d) as of the Time of Closing, the representations and warranties of each
of the MindfulEye Group contained in this Agreement or contained in
any certificates or documents delivered by any of them pursuant to
this Agreement shall be completely true as if such representations and
warranties had been made as of the Time of Closing.
The conditions set forth above are for the exclusive benefit of Rabatco and may
be waived by Rabatco in whole or in part at any time at or before the Time of
Closing.
2.2 The Shareholders' obligations to carry out the terms of this Agreement and
to complete the transactions contemplated under this Agreement are subject to
the fulfilment to their satisfaction of each of the following conditions that:
(a) immediately prior to the Time of Closing but before the Financing,
Rabatco's issued and outstanding share capital will be not more than
5,830,000 common shares and there will be no other options, warrants
or other rights to acquire common shares of Rabatco, except pursuant
to this Agreement and the Financing;
(b) at the Time of Closing, the solicitors for Rabatco shall provide an
opinion dated as of the Closing Date, substantially in the form of
Schedule B to this Agreement (the "Rabatco Solicitor Opinion");
(c) at the Time of Closing, the common shares of Rabatco will be quoted on
the Over the Counter Bulletin Board of NASDAQ (the "OTC Board");
(d) by the Time of Closing, Rabatco shall have arranged for and received
the Financing and at the Time of Closing Rabatco shall advance to
Mindful Eye not less than US$2,000,000, either as share capital or as
a loan at Rabatco's discretion, on such terms as Rabatco may in its
discretion impose;
(e) as of the Time of Closing, Rabatco shall have complied with all of its
covenants and agreements contained in this Agreement; and
(f) as of the Time of Closing, the representations and warranties of
Rabatco contained in this Agreement or contained in any certificates
or documents delivered by it pursuant to this Agreement shall be
completely true as if such representations and warranties had been
made by Rabatco as of the Time of Closing.
The conditions set forth above are for the exclusive benefit of the Shareholders
and may be waived by the Shareholders in whole or in part at or before the Time
of Closing.
2.3 The parties acknowledge and agree each with the other that this Agreement
and all of the transactions contemplated under this Agreement are subject to
receipt of any regulatory approvals that
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may be required under applicable laws. If any such approvals are required but
are not obtained by the Closing Date, then this Agreement shall terminate and be
of no further force or effect.
3. COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS
3.1 Each of the MindfulEye Group jointly and severally covenants and agrees with
Rabatco that each of the MindfulEye Group shall:
(a) from and including the Effective Date through to and including the
Time of Closing, permit Rabatco, through its directors, officers,
employees and authorized agents and representatives, at Rabatco's own
cost, full access to the books, records and property of MindfulEye
including, without limitation, all of the assets, contracts,
correspondence, accounts and minute books of MindfulEye, so as to
permit Rabatco to make such investigation ("Rabatco's Investigation")
of MindfulEye as Rabatco considers advisable;
(b) provide to Rabatco all such further documents, instruments and
materials and do all such acts and things as may be required by
Rabatco to obtain any regulatory approvals that may be required under
applicable laws;
(c) from and including the Effective Date through to and including the
Time of Closing, do all such acts and things that may be necessary to
ensure that all of the representations and warranties of each of the
MindfulEye Group contained in this Agreement or any certificates or
documents delivered by any of them pursuant to this Agreement remain
true and correct;
(d) from and including the Effective Date through to and including the
Time of Closing, preserve and protect all of the goodwill, assets,
business and undertaking of MindfulEye and, without limiting the
generality of the foregoing, carry on the development of the assets of
MindfulEye in a reasonable and prudent manner; and
(e) from and including the Effective Date through to and including the
Time of Closing, keep confidential all discussions and communications
(including all information communicated therein) between the parties,
and all written and printed materials of any kind whatsoever exchanged
by the parties, except only any information or material that:
(i) was in the public domain at the time of disclosure to a
party (the "Recipient");
(ii) was already in the possession of the Recipient prior to
disclosure, as demonstrated by the Recipient through
tangible evidence;
(iii) subsequently enters the public domain through no fault of
the Recipient or any officer, director, employee or agent of
the Recipient; or
(iv) is required to be disclosed by law or by a court or
regulatory authority of competent jurisdiction;
and, if so requested by Rabatco, each of the MindfulEye Group shall
arrange for any director, officer, employee, authorized agent or
representative of any member of the MindfulEye Group to enter into,
and each of the MindfulEye Group themselves shall
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enter into, a non-disclosure agreement with Rabatco in a form
acceptable to Rabatco acting reasonably.
3.2 Each of the MindfulEye Group jointly and severally covenants and agrees with
Rabatco that, from and including the Effective Date through to and including the
Time of Closing, each of the MindfulEye Group shall not:
(a) do any act or thing that would render any representation or warranty
of any of the MindfulEye Group contained in this Agreement or any
certificates or documents delivered by any of them pursuant to this
Agreement untrue or incorrect; nor
(b) sell, encumber or dispose of, or negotiate with any other person in
respect of a sale, encumbrance or disposition of, the MindfulEye
Shares or any other shares, goodwill, assets, business or undertaking
of MindfulEye.
3.3 Each of the MindfulEye Group jointly and severally acknowledges to and
agrees with Rabatco that Rabatco's Investigation shall in no way limit or
otherwise adversely affect the rights of Rabatco as provided for hereunder in
respect of the representations and warranties of each of the MindfulEye Group
contained in this Agreement or in any certificates or documents delivered by any
of them pursuant to this Agreement.
3.4 Each of Mr. Cusolle, Xx. Xxxxxx, Xx. Xxxxxxxx and Xx. Xxxx covenant and
agree with Rabatco to enter into the Employment Agreements with MindfulEye at
the time of Closing.
3.5 Rabatco covenants and agrees with the MindfulEye Group that Rabatco shall:
(a) use its reasonable best efforts to obtain any regulatory approvals for
this Agreement and the transactions contemplated hereunder required by
applicable laws on or before the Closing Date;
(b) from and including the Effective Date through to and including the
Time of Closing, do all such acts and things that may be necessary to
ensure that all of the representations and warranties of Rabatco
contained in this Agreement or in any certificates or documents
delivered by it pursuant to this Agreement remain true and correct;
(c) from and including the Effective Date through to and including the
Time of Closing, subject to its legal reporting obligations, keep
confidential all discussions and communications (including all
information communicated therein) between the parties, and all written
and printed materials of any kind whatsoever exchanged by the parties,
except only any information or material that:
(i) was in the public domain at the time of disclosure to a
party (the "Recipient");
(ii) was already in the possession of the Recipient prior to
disclosure, as demonstrated by the Recipient through
tangible evidence;
(iii) subsequently enters the public domain through no fault of
the Recipient or any officer, director, employee or agent of
the Recipient; or (iv)
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(iv) is required to be disclosed by law or by a court or
regulatory authority of competent jurisdiction;
and, if so requested by MindfulEye, Rabatco shall arrange for any
director, officer, employee, authorized agent or representative of
Rabatco to enter into, and Rabatco itself shall enter into, a
non-disclosure agreement with MindfulEye in a form acceptable to
MindfulEye acting reasonably;
(d) use its commercially reasonable best efforts to arrange for the
Financing; and
(e) as soon as reasonably practicable after the Time of Closing, deliver
to the MindfulEye Group all the books and records of Rabatco,
including all accounting records and bank and investment accounts.
3.6 Rabatco covenants and agrees with the MindfulEye Group that, from and
including the Effective Date through to and including the Time of Closing,
Rabatco shall not:
(a) do any act or thing that would render any representation or warranty
of Rabatco contained in this Agreement or any certificates or
documents delivered by it pursuant to this Agreement untrue or
incorrect;
(b) subject always to Rabatco's duty to fully comply with its legal
obligations, publish any press release or make any public filing
without first notifying the Vendors and giving the Vendors a
reasonable opportunity to review and provide comments regarding the
accuracy of the information in any such release or filing; nor
(c) enter into any agreement or commitment or obligation pursuant to which
Rabatco could be required to expend more than US$10,000, except:
(i) as contemplated by this Agreement or required to comply with
Rabatco's covenants hereunder;
(ii) with the prior written consent of the Vendors; or
(iii) in respect of professional fees for services rendered to
Rabatco in respect of the negotiation, settlement,
execution, implementation and enforcement of this Agreement
and the completion of the transactions contemplated herein;
(collectively, "Transaction Costs").
3.7 At the time of Closing, Rabatco will take all necessary corporate actions so
that as soon as practicable after Closing the officers and directors of Rabatco
will be:
Directors: Xx. Xxxxxx
Mr. Cusolle
Xx. Xxxxxxxx
Xx. Xxxx
Xx. Xxxxxxx Xxxxxxxx ("Xx. Xxxxxxxx")
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Officers: President: Xx. Xxxxxx
Secretary: Xx. Xxxx
4. REPRESENTATIONS AND WARRANTIES
4.1 In order to induce Rabatco to enter into this Agreement and complete its
transactions contemplated hereunder, each of the Shareholders other than Xx.
Xxxxxxx jointly and severally represents and warrants to Rabatco that:
(a) MindfulEye was duly incorporated under the laws of British Columbia
and:
(i) is not a "reporting company" within the meaning of section 1
of the British Columbia Company Act, R.S.B.C. 1996, Chap. 62
and is not subject to any statutory registration or filing
requirements applicable to public reporting companies;
(ii) has the power, authority and capacity to enter into this
Agreement and carry out its terms; and
(iii) is in good standing with respect to the filing of all annual
reports required under the laws of British Columbia;
(b) the Directors and Officers of MindfulEye are as follows:
(i) Xx. Xxxxxx - Director and President;
(ii) Mr. Cusolle - Director;
(iii) Xx. Xxxxxxxx - Director;
(iv) Xx. Xxxx - Director and Secretary; and
(v) Xx. Xxxxxxxx - Director
(c) the authorized and issued share capital of MindfulEye is as set forth
in Recital A of this Agreement;
(d) except for the MindfulEye Shares, there are no documents, instruments
or other writings of any kind whatsoever which constitute a security
of MindfulEye and, except as is provided for by operation of this
Agreement, there are no options, agreements or rights of any kind
whatsoever to acquire directly or indirectly any other shares of
MindfulEye;
(e) the Memorandum and Articles of MindfulEye have not been altered since
22 February 2000;
(f) all of the material transactions of MindfulEye which are required to
be recorded or filed in or with the books or records of MindfulEye
have been promptly and properly so recorded or filed and the minute
books of MindfulEye contain all records of the meetings and
proceedings of the shareholders and directors of MindfulEye since its
incorporation;
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(g) MindfulEye hold all licences and permits that are required for
carrying on its business in the manner in which such business has been
carried on;
(h) MindfulEye is the registered and beneficial owner of all rights, title
and interest in and to all tangible and intangible property
(collectively the "Assets") associated with all business carried on by
MindfulEye, including without limitation the internet domain names
"XxxxxxxXxx.xxx" (the "Domain Name") and the other assets listed on
Schedule C to this Agreement, subject only to such qualifications and
limitations as are indicated in Schedule C;
(i) MindfulEye has good and marketable exclusive title to each of the
Assets free and clear of all liens, charges and encumbrances of any
kind whatsoever save and except those specified as "Permitted
Encumbrances" on Schedule C to this Agreement, and in particular, at
the Closing:
(i) MindfulEye will be the sole and exclusive legal and
beneficial owner of the Domain Name, free and clear of all
encumbrances whatsoever, and will not be a party to or bound
by any contract or any other obligation whatsoever that
limits or impairs its ability to sell, transfer, assign or
convey, or that otherwise affects, the Domain Name;
(ii) MindfulEye will be the registered owner of the Domain Name,
and all fees or other costs associated with maintaining the
registration of the Domain Name will have been paid for the
2000 calendar year and the registration of the Domain Name
will be in good standing with Network Solutions Inc.; and
(iii) no other person will have been granted any interest in or
right to use all or any portion of the Domain Name;
(j) each item of machinery and equipment of any kind whatsoever comprised
in the Assets is in reasonable operating condition and in a state of
reasonable maintenance and repair taking into account its age and use;
(k) all deposit, savings, investment and brokerage accounts and safety
deposit boxes of MindfulEye are listed on Schedule C attached hereto;
(l) MindfulEye has the corporate power to own the assets it owns, and to
carry on the business carried on by it, and is duly qualified to carry
on business in all jurisdictions in which it carries on business;
(m) the financial statements of MindfulEye for the period ending 31
December 1999 (collectively, the "Financial Statements"), copies of
which are attached hereto as Schedule D, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis and are true and correct in every material respect
and present fairly and accurately the financial position and results
of the operations of MindfulEye for the periods then ended, and there
has been no material adverse change to the financial position of
Mindful Eye since the date of the last of the Financial Statements;
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(n) save for any costs and expenses arising in the ordinary course of
business, all material outstanding liabilities, whether direct,
indirect, absolute, contingent or otherwise, whatsoever of MindfulEye
have been disclosed in writing to Rabatco prior to the Effective Date,
and the total liabilities of MindfulEye do not exceed US$350,000;
(o) except as disclosed in writing to Rabatco prior to Rabatco's execution
of this Agreement:
(i) no dividends or other distributions of any kind whatsoever
on any shares in the capital of MindfulEye has been made,
declared or authorized;
(ii) no new machinery or equipment of any kind whatsoever has
been ordered by, or installed or assembled on the premises
of, MindfulEye;
(iii) MindfulEye is not indebted to any of the Shareholders,
except in respect of miscellaneous expenses incurred on
behalf of MindfulEye which do not exceed, in the aggregate,
US$5,000;
(iv) none of the Shareholders or any other officer, director or
employee of MindfulEye is indebted or under obligation to
MindfulEye on any account whatsoever; and
(v) MindfulEye has not guaranteed or agreed to guarantee any
debt, liability or other obligation of any kind whatsoever
of any person, firm or corporation of any kind whatsoever;
(p) since 31 December 1999, except as disclosed to Rabatco in writing
prior to the Effective Date:
(i) there has not been any material adverse change of any kind
whatsoever in the financial position or condition of
MindfulEye, or any damage, loss or other change of any kind
whatsoever in circumstances materially affecting the
business or Assets of MindfulEye or the right or capacity of
MindfulEye to carry on its business;
(ii) MindfulEye has not waived or surrendered any right of any
kind whatsoever of material value; and
(iii) except as may be expressly permitted under this Agreement,
MindfulEye has not discharged, satisfied or paid any lien,
charge or encumbrance of any kind whatsoever or obligation
or liability of any kind whatsoever other than current
liabilities in the ordinary course of its business;
(q) the directors, officers, key employees and independent contractors and
consultants of MindfulEye, and all of their compensation arrangements
with MindfulEye, whether as directors, officers, employees,
independent contractors or consultants, are as listed on Schedule E to
this Agreement;
(r) no payments of any kind whatsoever have been made or authorized by
MindfulEye or Holdings directly or indirectly to or on behalf of any
of the Shareholders or any of the directors, officers, key employees,
independent contractors or consultants of MindfulEye
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except in accordance with those compensation arrangements specified on
Schedule E to this Agreement;
(s) there are no pension, profit sharing, group insurance or similar plans
or other deferred compensation plans of any kind whatsoever affecting
MindfulEye or Holdings other than those, if any, specified on Schedule
E to this Agreement;
(t) MindfulEye is not now, nor has it ever been, a party to any collective
agreement with any labour union or other association of employees of
any kind whatsoever, no collective bargaining agent has been certified
in respect of MindfulEye, and there is no application pending for
certification of a collective bargaining agent in respect of
MindfulEye;
(u) the contracts and agreements included on Schedule E to this Agreement
and those additional contracts and agreements specified on Schedule F
to this Agreement (collectively the "Material Contracts") constitute
all of the material contracts and agreements of MindfulEye;
(v) except as may be noted on the appropriate Schedule to this Agreement,
the Material Contracts are in good standing in all material respects
and not in default in any respect;
(w) MindfulEye has not licensed, leased, transferred, disposed of or
encumbered any of the Assets in any way, or permitted any third party
access to any of the Assets the value of which may be compromised by
such access, including in particular the source code to any computer
software, any subscriber lists or any trade secret information
included in the Assets, except only in accordance with the terms of
the Material Contracts;
(x) no third party privacy or intellectual property rights, including
without limitation, copyright, trade secret or patent rights, were
violated in the creation, compilation or acquisition of, or are
violated by the use of, any of the Assets by MindfulEye or by any
party through whom MindfulEye acquired title or a license or to whom
MindfulEye has granted a license in respect of the Assets, and in
particular the use of the Domain Names by MindfulEye does not infringe
upon or induce or contribute to the infringement of any intellectual
property rights, domestic or foreign, of any other person;
(y) MindfulEye is not in material breach of any applicable law, ordinance,
statute, regulation, by-law, order or decree of any kind whatsoever
including, without limitation, any applicable securities laws;
(z) all tax returns and reports of MindfulEye that are required by law to
have been filed have been filed and are substantially true, complete
and correct and all taxes and other government charges of any kind
whatsoever of MindfulEye have been paid or disclosed in writing to
Rabatco before Rabatco entered into this Agreement;
(aa) MindfulEye has not:
(i) made any election under any applicable tax legislation with
respect to the acquisition or disposition of any property at
other than fair market value;
(ii) acquired any property for proceeds greater than the fair
market value thereof; or
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(iii) disposed of anything for proceeds less than the fair market
value thereof;
(bb) MindfulEye has made all elections required to have been made under any
applicable tax legislation in connection with any dividends or other
distributions made by MindfulEye and all such elections were true and
correct and filed in the prescribed form and within the prescribed
time period;
(cc) adequate provision has been made for taxes payable by MindfulEye for
the current period for which tax returns are not yet required to be
filed and there are no agreements, waivers or other arrangements of
any kind whatsoever providing for an extension of time with respect to
the filing of any tax return by, or payment of, any tax or
governmental charge of any kind whatsoever by MindfulEye;
(dd) MindfulEye does not have any contingent tax liabilities of any kind
whatsoever, and there are no grounds which would prompt a reassessment
of MindfulEye, including for aggressive treatment of income or
expenses in earlier tax returns filed;
(ee) there are no amounts outstanding and unpaid for which MindfulEye has
previously claimed a deduction under any applicable tax legislation;
(ff) MindfulEye has made all collections, deductions, remittances and
payments of any kind whatsoever and filed all reports and returns
required by it to be made or filed under the provisions of all
applicable statutes requiring the making of collections, deductions,
remittances or payments of any kind whatsoever;
(gg) there are no actions, suits, judgements, investigations or proceedings
of any kind whatsoever outstanding, pending or known to be threatened
against or affecting MindfulEye at law or in equity or before or by
any federal, provincial, state, municipal or other governmental
department, commission, board, bureau or agency of any kind whatsoever
and there is no basis therefor;
(hh) MindfulEye has good and sufficient power, authority and capacity to
enter into this Agreement and complete its respective transactions
contemplated under this Agreement on the terms and conditions set
forth herein;
(ii) MindfulEye has taken all necessary or desirable actions, steps and
corporate and other proceedings to approve or authorize, validly and
effectively, the entering into of, and the execution, delivery and
performance of, this Agreement;
(jj) this Agreement has been duly executed and delivered by MindfulEye and,
assuming the due authorization, execution and delivery hereof by
Rabatco and the Shareholders, constitutes a legal, valid and binding
obligation of MindfulEye, enforceable against it in accordance with
its terms subject to:
(i) bankruptcy, insolvency, moratorium, reorganization and other
laws relating to or affecting the enforcement of creditors'
rights generally; and
(ii) the fact that equitable remedies, including the remedies of
specific performance and injunction, may only be granted in
the discretion of a court;
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(kk) except as disclosed to Rabatco, MindfulEye is not under any
obligation, contractual or otherwise, to request or obtain the consent
of any person, and no permits, licenses, certifications,
authorizations or approvals of, or notifications to, any federal,
state, municipal or local government or governmental agency, board,
commission or authority are required to be obtained by MindfulEye in
connection with the execution, delivery or performance by MindfulEye
of this Agreement or the completion of any of the transactions
contemplated herein, and complete and correct copies of any agreements
under which MindfulEye is obligated to request or obtain any such
consent have been provided to Rabatco;
(ll) the execution and delivery of this Agreement, the performance of its
obligations under this Agreement and the Completion will not:
(i) conflict with, or result in the breach of or the
acceleration of any indebtedness under, or constitute
default under, any of the constating documents of
MindfulEye, or any of the terms of any indenture, mortgage,
agreement, lease, licence or other instrument of any kind
whatsoever to which any of the MindfulEye Group is a party
or by which any of them is bound, or any judgement or order
of any kind whatsoever of any court or administrative body
of any kind whatsoever by which any of them is bound; nor
(ii) result in the violation of any law or regulation applicable
to any of the MindfulEye Group;
(mm) MindfulEye has not incurred any liability for agency, brokerage,
referral or finder's fees, commissions or compensation of any kind
whatsoever with respect to this Agreement or any transaction
contemplated under this Agreement; and
(nn) the representations and warranties of the Shareholders contained in
this Agreement disclose all material facts known to each of them
specifically relating to the transactions contemplated under this
Agreement which, so far as the Shareholders are aware, materially and
adversely affect, or in the future may materially and adversely
affect, their respective abilities to perform their respective
obligations under this Agreement or the value of the MindfulEye Shares
or the Assets.
4.2 In order to induce Rabatco to enter into this Agreement and complete its
transactions contemplated hereunder, each of the Shareholders jointly and
severally represents and warrants to Rabatco that, in respect of that
Shareholder:
(a) that Shareholder has good and sufficient power, authority and capacity
to enter into this Agreement and complete the transactions
contemplated under this Agreement on the terms and conditions set
forth herein;
(b) that Shareholder has taken all necessary or desirable actions, steps
and corporate and other proceedings to approve or authorize, validly
and effectively, the entering into of, and the execution, delivery and
performance of, this Agreement;
(c) this Agreement has been duly executed and delivered by that
Shareholder and, assuming the due authorization, execution and
delivery hereof by Rabatco, MindfulEye and the
-12-
other Shareholders, constitutes a legal, valid and binding obligation
of that Shareholder, enforceable against it in accordance with its
terms subject to:
(i) bankruptcy, insolvency, moratorium, reorganization and other
laws relating to or affecting the enforcement of creditors'
rights generally; and
(ii) the fact that equitable remedies, including the remedies of
specific performance and injunction, may only be granted in
the discretion of a court;
(d) except as disclosed to Rabatco, that Shareholder is not under any
obligation, contractual or otherwise, to request or obtain the consent
of any person, and no permits, licenses, certifications,
authorizations or approvals of, or notifications to, any federal,
state, municipal or local government or governmental agency, board,
commission or authority are required to be obtained by that
Shareholder in connection with the execution, delivery or performance
by that Shareholder of this Agreement or the completion of any of the
transactions contemplated herein, and complete and correct copies of
any agreements under which that Shareholder is obligated to request or
obtain any such consent have been provided to Rabatco;
(e) the MindfulEye Shares indicated in Recital A of this Agreement
opposite his, her or its name are and will on the Closing Date
immediately prior to Completion be validly issued and outstanding
fully paid and non-assessable common shares of MindfulEye registered
in the name of, and legally and beneficially owned by, that
Shareholder, free and clear of all voting restrictions, trade
restrictions, liens, claims, charges or encumbrances of any kind
whatsoever;
(f) the Shareholder has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of an investment in the Rabatco Shares and is able to bear the
economic risk of loss of the Shareholder's entire investment;
(g) Rabatco has provided to the Shareholder the opportunity to ask
questions and receive answers concerning the terms and conditions of
the issuance of the Rabatco Shares and the Shareholder has had access
to such information concerning Rabatco as the Shareholder has
considered necessary or appropriate in connection with the investment
decision to acquire the Rabatco Shares;
(h) the Shareholder is acquiring the Rabatco Shares for the Shareholder's
own account, for investment purposes only and not with a view to any
resale, distribution or other disposition of the Rabatco Shares in
violation of applicable United States securities laws;
(i) the Shareholder has not agreed to acquire the Rabatco Shares as a
result of any form of general solicitation or general advertising,
including advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media or broadcast
over radio, or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising;
(j) the Shareholder is not a "U.S. Person", the definition of which
includes, but is not limited to, an individual resident in the United
States and an estate or trust of which any executor or administrator
or trustee, respectively, is a U.S. Person, any partnership or
corporation organized or incorporated under the laws of the United
States, and any
-13-
partnership or corporation organized or incorporated under the laws of
any foreign jurisdiction by a U.S. Person principally for the purposes
of investing in securities not registered under the United States
Securities Act of 1933 (the "1933 Act");
(k) the Shareholder was outside the United States at the time of execution
and delivery of this Agreement;
(l) no offers to sell the Rabatco Shares were made by any person to the
Shareholder while the Shareholder was in the United States; and
(m) the Rabatco Shares are not being acquired, directly or indirectly, for
the account or benefit of a U.S. Person or a person in the United
States.
4.3 The representations and warranties of each of the Shareholders contained in
this Agreement shall be true at the Time of Closing as though they were made at
the Time of Closing, and they shall survive the Completion and remain in full
force and effect thereafter for the benefit of Rabatco.
4.4 Each of the Shareholders acknowledges and agrees that:
(a) the Rabatco Shares have not been and will not be registered under the
1933 Act or the securities laws of any state of the United States or
other jurisdiction and that the exchange contemplated hereby is being
made in reliance on the Shareholder's representations and warranties
regarding the circumstances required for an exemption from such
registration requirements;
(b) the issuance of the Rabatco Shares has not been approved or
disapproved by the United States Securities and Exchange Commission,
any state securities agency, or any foreign securities agency, and
Rabatco is not registered under the United States Securities Exchange
Act of 1934 (the "Exchange Act");
(c) the certificates representing the Rabatco Shares will bear a legend
stating that such shares have not been registered under the 1933 Act
or the securities laws of any state of the United States and may not
be traded except in compliance with the 1933 Act and the Exchange Act;
and
(d) if the Shareholder decides to offer, sell or otherwise transfer any of
the Rabatco Shares, he will not offer, sell or otherwise transfer any
of the Rabatco Shares directly or indirectly, unless:
(i) the sale is to Rabatco;
(ii) the sale is made pursuant to the exemption from the
registration requirements under the 1933 Act provided by
Rule 144 thereunder or Regulation S, and in accordance with
any applicable state securities or "Blue Sky" laws; or
(iii) the Rabatco Shares are sold in a transaction that does not
require registration under the 1933 Act or any applicable
state laws and regulations governing the offer and sale of
securities, and he has prior to such sale furnished to
Rabatco an opinion of counsel to that effect reasonably
satisfactory to Rabatco.
-14-
4.5 Each of the Shareholders consents to Rabatco making a notation on its
records or giving instructions to any transfer agent of Rabatco to implement the
restrictions on transfer set forth and described herein.
4.6 Each of the Shareholders acknowledges and accepts that there may be material
tax consequences to a Shareholder in respect of an acquisition or disposition of
the Rabatco Shares, and that Rabatco gives no opinion and makes no
representation with respect to the tax consequences to the Shareholder under
United States, state, local or foreign tax law in respect of the Shareholder's
acquisition or disposition of the Rabatco Shares.
4.7 In order to induce the Shareholders to enter into this Agreement and
complete the transactions contemplated hereunder, Rabatco represents and
warrants to the Shareholders that, except as disclosed to MindfulEye prior to
the Effective Date:
(a) Rabatco was and remains duly incorporated and validly existing under
the laws of the State of Nevada, and Rabatco is in good standing with
respect to all filings required by the Nevada Secretary of State;
(b) the authorized capital of Rabatco consists of 100,000,000 shares with
a par value of $0.001 per share, of which not more than 5,830,000 (the
"Outstanding Shares") will be issued and outstanding as of the Closing
Date prior to the Financing;
(c) other than as contemplated in this Agreement, no further shares of
Rabatco will be issued after the Effective Date, and there are no
commitments, plans or arrangements of any kind whatsoever to issue any
further shares of Rabatco, nor are there any outstanding options,
warrants, convertible securities or other rights of any kind
whatsoever calling for the issuance of any of the unissued shares of
Rabatco;
(d) except for 5,830,000 of the common shares of Rabatco that are
currently issued, the Financing Shares, and the further shares to be
issued pursuant to this Agreement, there will be on the Closing Date
no documents, instruments or other writings of any kind whatsoever
which constitute a security of Rabatco;
(e) the Rabatco Shares to be issued on Completion will be, when issued,
validly issued as fully paid and non-assessable;
(f) Rabatco has good and sufficient power, authority and capacity to enter
into this Agreement and complete its transactions contemplated under
this Agreement on the terms and conditions set forth herein;
(g) the common shares of Rabatco are currently quoted on the OTC Board;
(h) Rabatco has taken all necessary or desirable actions, steps and
corporate and other proceedings to approve or authorize, validly and
effectively, the entering into of, and the execution, delivery and
performance of, this Agreement;
(i) this Agreement has been duly executed and delivered by Rabatco and,
assuming the due authorization, execution and delivery hereof by
MindfulEye and the Shareholders, constitutes a legal, valid and
binding obligation of Rabatco, enforceable against it in accordance
with its terms subject to:
-15-
(i) bankruptcy, insolvency, moratorium, reorganization and other
laws relating to or affecting the enforcement of creditors'
rights generally; and
(ii) the fact that equitable remedies, including the remedies of
specific performance and injunction, may only be granted in
the discretion of a court;
(j) Rabatco is not under any obligation, contractual or otherwise, to
request or obtain the consent of any person, and no permits, licenses,
certifications, authorizations or approvals of, or notifications to,
any federal, state, municipal or local government or governmental
agency, board, commission or authority are required to be obtained by
Rabatco in connection with the execution, delivery or performance by
Rabatco of this Agreement or the completion of any of the transactions
contemplated herein, and complete and correct copies of any agreements
under which Rabatco is obligated to request or obtain any such consent
have been provided to the Vendors;
(k) the execution, delivery and performance of this Agreement and each of
the other agreements contemplated or referred to herein by Rabatco,
and the completion of the transactions contemplated hereby, will not
constitute or result in a violation or breach of or default under:
(i) any term or provision of any of the memorandum, articles or
other constating documents of Rabatco; or
(ii) the terms of any indenture, agreement (written or oral),
instrument or understanding or other obligation or
restriction to which Rabatco is a party or by which it is
bound; or
(iii) any term or provision of any licenses, registrations or
qualifications of Rabatco or any order of any court,
governmental authority or regulatory body or any applicable
law or regulation of any jurisdiction;
(l) Rabatco is not a reporting issuer pursuant to the 1933 Act or the
Exchange Act;
(m) Rabatco has made all filings with the U.S. Securities and Exchange
Commission and all state securities regulators that it is required to
make (the "Public Reports"), each of the Public Reports complies with
United States securities laws in all material respects, and none of
the Public Reports, as of their respective dates, contained any untrue
statement of a material fact that would make the statements made
therein, in light of the circumstances under which they were made,
misleading;
(n) Rabatco's financial statements for the year ended 31 December 1999
("Rabatco Financial Statements"), true copies of which are attached
hereto as Schedule G, have been prepared in accordance with generally
accepted accounting principles, are true, correct and complete in all
respects and present fairly the financial condition of Rabatco as of
the date thereof, including the assets and liabilities of Rabatco as
of the date thereof, and the expenses of Rabatco for that fiscal
period;
(o) all financial transactions of Rabatco have been recorded in the
financial books and records of Rabatco in accordance with good
business practice, such financial books and
-16
records form the basis for the Rabatco Financial Statements and the
Rabatco Financial Statements have been filed with the United States
Securities Exchange Commission;
(p) there are no actions, suits or proceedings, judicial or administrative
(whether or not purportedly on behalf of Rabatco) pending or, to the
best of the knowledge of Rabatco, threatened, by or against or
affecting Rabatco, at law or in equity, or before or by any court or
any federal, provincial, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, and to the best of the knowledge of Rabatco,
there are no grounds on which any such action, suit or proceeding
might be commenced with any reasonable likelihood of success;
(q) subsequent to the respective dates as of which information is given in
the Public Reports, there has been no material adverse change, or any
fact known to Rabatco and not disclosed to the Shareholders that could
reasonably be expected to result in a material adverse change in the
business or financial condition of Rabatco and, except as disclosed in
the Public Reports, there is no litigation or governmental proceeding
to which Rabatco is a party or to which any property of Rabatco is
subject or that is pending or, to the best of the knowledge of
Rabatco, contemplated against Rabatco that might result in any
material adverse change in the business or financial condition of
Rabatco;
(r) Rabatco has not declared or paid any dividend or made any other
distribution on any of its shares of any class, or redeemed or
purchased or otherwise acquired any of its shares of any class, or
reduced its authorized capital or issued capital, or agreed to do any
of the foregoing, except that Rabatco has agreed to repurchase at
original issue price and cancel 920,000 common shares to reduce
Rabatco's issued and outstanding share capital to 5,830,000 common
shares by the Closing Date;
(s) Rabatco is not subject to any obligation to make any investment in or
to provide funds by way of loan, capital contribution or otherwise to
any person;
(t) at the Closing Time, Rabatco will have outstanding liabilities not
exceeding US$80,000, inclusive of Transaction Costs;
(u) Rabatco is not a party to or bound by any outstanding or executory
agreement, contract or commitment, whether written or oral with an
aggregate value of greater than US$5,000, except for Transaction Costs
or any contract, lease or agreement described or referred to in this
Agreement or in the Schedules hereto;
(v) to the best of its knowledge, Rabatco is not in violation of any
federal, state, municipal or other law, regulation or order of any
government or governmental or regulatory authority, domestic or
foreign;
(w) the representations and warranties and other factual statements of
Rabatco contained in this Agreement, and all information in the
Schedules hereto, taken as a whole, do not contain any false statement
of material fact or omit to state a material fact necessary to prevent
the statements made herein and therein from being misleading;
(x) to the best of the knowledge of Rabatco, there are no proceedings or
investigations outstanding or threatened by any securities regulatory
authority against Rabatco, its directors, officers or shareholders,
and there is no circumstance which exists which could
-17-
reasonably be expected to lead to an investigation against Rabatco,
its directors, officers or shareholders; and
(y) attached as Schedule H is a complete list of all ongoing contracts,
bank accounts, and investment accounts of Rabatco.
4.8 The representations and warranties of Rabatco contained in this Agreement
shall be true at the Time of Closing as though they were made at the Time of
Closing, and they shall survive the Completion and remain in full force and
effect thereafter for the benefit of the Shareholder.
5. INDEMNITIES
5.1 Notwithstanding the completion of the transactions contemplated under this
Agreement or Rabatco's Investigation, the representations, warranties and
acknowledgements of any of the Shareholders contained in this Agreement or any
certificates or documents delivered by any of them pursuant to this Agreement
shall survive the Completion and shall continue in full force and effect
thereafter for the benefit of Rabatco. If any of the representations, warranties
or acknowledgements given by any of the Shareholders is found to be untrue or
there is a breach of any covenant or agreement in this Agreement on the part of
any of the MindfulEye Group, then the party or parties responsible shall jointly
and severally indemnify and save harmless Rabatco from and against any and all
liability, claims, debts, demands, suits, actions, penalties, fines, losses,
costs (including legal fees, disbursements and taxes as charged on a lawyer and
own client basis), damages and expenses of any kind whatsoever which may be
brought or made against Rabatco by any person, firm or corporation of any kind
whatsoever or which may be suffered or incurred by Rabatco, directly or
indirectly, arising out of or as a consequence of any such misrepresentation or
breach of warranty, acknowledgement, covenant or agreement. Without in any way
limiting the generality of the foregoing, this shall include any loss of any
kind whatsoever which may be suffered or incurred by Rabatco, directly or
indirectly, arising out of any material assessment or reassessment levied upon
MindfulEye for tax, interest and/or penalties relating to any period of business
operations up to and including the Closing Date and all claims, demands, costs
(including legal fees, disbursements and taxes as charged on a lawyer and own
client basis) and expenses of any kind whatsoever in respect of the foregoing.
5.2 Notwithstanding the completion of the transactions contemplated under this
Agreement or any investigation by the Shareholders, the representations,
warranties and acknowledgements of Rabatco contained in this Agreement or any
certificates or documents delivered by Rabatco pursuant to this Agreement shall
survive the Completion and shall continue in full force and effect thereafter
for the benefit of the Shareholders. If any of the representations, warranties
or acknowledgements given by Rabatco is found to be untrue or there is a breach
of any covenant or agreement in this Agreement on the part of Rabatco, then
Rabatco shall indemnify and save harmless the Shareholders from and against any
and all liability, claims, debts, demands, suits, actions, penalties, fines,
losses, costs (including legal fees, disbursements and taxes as charged on a
lawyer and own client basis), damages and expenses of any kind whatsoever which
may be brought or made against the Shareholders by any person, firm or
corporation of any kind whatsoever or which may be suffered or incurred by the
Shareholders, directly or indirectly, arising out of or as a consequence of any
such misrepresentation or breach of warranty, acknowledgement, covenant or
agreement. Without in any way limiting the generality of the foregoing, this
shall include any loss of any kind whatsoever which may be suffered or incurred
by the Shareholders, directly or indirectly, arising out of any material
assessment or reassessment levied upon Rabatco for tax, interest and/or
penalties relating to any period of business operations up to and including the
Closing Date and all claims, demands, costs (including legal fees, disbursements
and taxes as charged on a lawyer and own client basis) and expenses of any kind
whatsoever in respect of the foregoing.
-18-
Subject to any regulatory approval that may be required, each of the
Shareholders may elect to receive in lieu of a cash settlement, common shares at
the simple average closing price for the common shares of Rabatco for the 30
trading days preceding the date of any award ordered by a court pursuant to this
indemnity.
6. CLOSING
6.1 At the Time of Closing, the MindfulEye Group shall deliver to the solicitors
for Rabatco:
(a) certified true copies of the resolutions of the directors of
MindfulEye and Xxxxxxxx Capital evidencing that the directors of
MindfulEye and Xxxxxxxx Capital have approved this Agreement and all
of the transactions of MindfulEye and Xxxxxxxx Capital contemplated
hereunder, specifically referring to:
(i) the exchange and transfer of the MindfulEye Shares from the
Shareholders to Rabatco as provided for in this Agreement;
(ii) the execution of the Employment Agreements by MindfulEye;
(iii) the cancellation of the share certificates (the "Old Share
Certificates") representing the MindfulEye Shares held as
set forth in Recital A of this Agreement; and
(iv) the issuance of a new share certificate (the "New Share
Certificate") representing the MindfulEye Shares registered
in the name of Rabatco;
(b) the Old Share Certificates;
(c) the New Share Certificate;
(d) all minute books and seals of MindfulEye;
(e) all original and duplicate certificates evidencing registration
anywhere in the world of any interest in tangible or intangible
property included in the Assets;
(f) releases in the form of Schedule I to this Agreement (the "Releases")
from each of the Shareholders of all claims against MindfulEye for
outstanding amounts owing by MindfulEye on account of any loans,
bonuses, reimbursements, compensation, fees, royalties, dividends or
other consideration whatsoever;
(g) the Employment Agreements, completed and fully and duly executed;
(h) the MindfulEye Solicitor Opinion;
(i) certificates of confirmation from each of the Shareholders,
substantially in the form of Schedule J to this Agreement;
(j) the consent of Xx. Xxxxxx to become a director and the President of
Rabatco, the consent of Xx. Xxxx to become a director and the
Secretary of Rabatco, and the consents of Mr. Cusolle, Xx. Xxxxxxxx
and Xx. Xxxxxxxx to become directors of Rabatco; and
-19-
(k) any other materials that are, in the opinion of the solicitors for
Rabatco, reasonably required to complete the transactions contemplated
under this Agreement.
6.2 At the Time of Closing, Rabatco shall deliver to the solicitors for the
Shareholders:
(a) certified true copies of the resolutions of the directors and, if
shareholder approval is required, of the shareholders of Rabatco,
evidencing that the directors and, as applicable, the shareholders, of
Rabatco have approved this Agreement and all of the transactions of
Rabatco contemplated hereunder, including the issuance of the Rabatco
Shares in exchange for the MindfulEye Shares;
(b) share certificates representing the Rabatco Shares registered in the
names of the Shareholders as jointly directed by the Shareholders in
writing;
(c) a certificate of confirmation signed by a director or officer of
Rabatco substantially in the form of Schedule K to this Agreement;
(d) the Rabatco Solicitor Opinion;
(e) the resignation of Xx. Xxxx X. Xxxxx as the sole Director and Officer
of Rabatco, effective on Completion; and
(f) all minute books and seals of Rabatco.
7. GENERAL
7.1 Time and each of the terms and conditions of this Agreement shall be of the
essence of this Agreement and any waiver by the parties of this paragraph 7.1 or
any failure by them to exercise any of their rights under this Agreement shall
be limited to the particular instance and shall not extend to any other instance
or matter in this Agreement or otherwise affect any of their rights or remedies
under this Agreement.
7.2 The Schedules to this Agreement incorporated by reference and the recitals
to this Agreement constitute a part of this Agreement.
7.3 This Agreement constitutes the entire Agreement between the parties hereto
in respect of the matters referred to herein and there are no representations,
warranties, covenants or agreements, expressed or implied, collateral hereto
other than as expressly set forth or referred to herein.
7.4 The headings in this Agreement are for reference only and do not constitute
terms of the Agreement.
7.5 The provisions contained in this Agreement which, by their terms, require
performance by a party to this Agreement subsequent to the Closing Date of this
Agreement, shall survive the Closing Date of this Agreement.
7.6 No alteration, amendment, modification or interpretation of this Agreement
or any provision of this Agreement shall be valid and binding upon the parties
hereto unless such alteration, amendment, modification or interpretation is in
written form executed by the parties directly affected by such alteration,
amendment, modification or interpretation.
-20-
7.7 Whenever the singular or masculine is used in this Agreement the same shall
be deemed to include the plural or the feminine or the body corporate as the
context may require.
7.8 The parties hereto shall execute and deliver all such further documents and
instruments and do all such acts and things as any party may, either before or
after the Closing Date, reasonably require in order to carry out the full intent
and meaning of this Agreement.
7.9 Any notice, request, demand and other communication to be given under this
Agreement shall be in writing and shall be delivered by hand to the appropriate
party at the address as first set out above or to such other addresses or by
such other means as may be designated in writing by the parties hereto in the
manner provided for in this paragraph, and shall be deemed to have been received
on the date of delivery by hand, or if delivered by e-mail or telecopy, then on
the date transmission completes.
7.10 This Agreement shall be subject to, governed by, and construed in
accordance with the laws of the Province of British Columbia, and the parties
attorn to the non-exclusive jurisdiction of the courts of British Columbia for
the resolution of all disputes arising under this Agreement.
7.11 This Agreement may be signed by the parties in as many counterparts as may
be deemed necessary, each of which so signed shall be deemed to be an original,
and all such counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals as of the
Effective Date:
SIGNED, SEALED & DELIVERED )
by XXX XXXXXX in the presence of: )
)
) /s/ XXX XXXXXX
Signature of Witness ) ----------------------------------
) XXX XXXXXX
Name: )
--------------------------------)
Address: )
-----------------------------)
)
---------------------------------------)
Occupation: )
--------------------------)
SIGNED, SEALED & DELIVERED by )
XXXX CUSOLLE in the presence of: )
)
) /s/ XXXX CUSOLLE
Signature of Witness ) ----------------------------------
) XXXX CUSOLLE
Name: )
--------------------------------)
Address: )
-----------------------------)
)
---------------------------------------)
Occupation: )
--------------------------)
-21-
SIGNED, SEALED & DELIVERED by )
XXX XXXXXXXX in the presence of: )
)
) /s/ XXX XXXXXXXX
Signature of Witness ) ----------------------------------
) XXX XXXXXXXX
Name: )
--------------------------------)
Address: )
-----------------------------)
)
---------------------------------------)
Occupation: )
--------------------------)
SIGNED, SEALED & DELIVERED by XXXXXX )
XXXX in the presence of: )
)
)
) /s/ XXXXXX XXXX
Signature of Witness ) ----------------------------------
) XXXXXX XXXX
Name: )
--------------------------------)
Address: )
-----------------------------)
)
---------------------------------------)
Occupation: )
--------------------------)
SIGNED, SEALED & DELIVERED by XXXXX )
XXXXXXX in the presence of: )
)
) /s/ XXXXX XXXXXXX
Signature of Witness ) ----------------------------------
) XXXXX XXXXXXX
Name: )
--------------------------------)
Address: )
-----------------------------)
)
---------------------------------------)
Occupation: )
--------------------------)
THE CORPORATE SEAL of )
XXXXXXXX CAPITAL CORP. was hereunto )
affixed in the presence of its )
authorized signatory(ies): )
)
) c/s
---------------------------------------)
Name: ---------------------------------)
Title: --------------------------------)
)
)
Name: ---------------------------------)
Title: --------------------------------)
-22-
THE CORPORATE SEAL of )
MINDFULEYE SYSTEMS INC. was hereunto )
affixed in the presence of its )
authorized signatory(ies): )
)
) c/s
---------------------------------------)
Name: ---------------------------------)
Title: --------------------------------)
)
)
Name: ---------------------------------)
Title: --------------------------------)
EXECUTED by RABATCO, INC. by: )
)
/s/ XXXX XXXXX )
---------------------------------------)
Name: ---------------------------------)
Title: )
-23-
SCHEDULE A
MindfulEye Solicitor Opinion
(letterhead of solicitors for MindfulEye)
o, 2000
o
o
Attention: o
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement") made effective as of the o day
of o, o, between Xxx Xxxxxx, Xxxxxxxx Capital Corp., Xxx Cusolle, Xxx
Xxxxxxxx, Xxxxxx Xxxx and Xxxxx Xxxxxxx (the "Shareholders"),
XxxxxxxXxx.xxx Systems Inc. ("MindfulEye"), and Rabatco Inc. ("Rabatco")
We are the solicitors for MindfulEye. We provide this opinion pursuant to
subparagraphs o and o of the Agreement. We have acted as counsel for MindfulEye
in connection with the negotiation, execution and completion of the Agreement.
We have considered such questions of law and examined such statutes and
regulations, corporate records, certificates and other documents and have made
such other examinations, searches and investigations as we have considered
necessary for the purpose of the opinion hereinafter expressed. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as certified or as
photocopies.
Based on and subject to the foregoing, we are of the opinion that:
1. MindfulEye is a company duly incorporated and validly existing under the
laws of the Province of British Columbia. MindfulEye is in good standing
with respect to the filing of annual reports required under the British
Columbia Company Act.
2. MindfulEye has all requisite corporate power and authority to enter into
and to perform its obligations under the Agreement.
3. All necessary steps and corporate action and proceedings have been taken to
authorize the execution and delivery of the Agreement by MindfulEye.
4. To the best of our knowledge, neither the execution and delivery of, nor
the performance of its obligations under the Agreement by MindfulEye will
conflict with or constitute a breach of or default under the constating
documents of MindfulEye or any commitment, agreement or other instrument to
which MindfulEye is a party or by which it is bound.
5. As at the Effective Date of the Agreement, the authorized capital of
MindfulEye consisted of _____ ______ shares [with a par value of ____ ].
6. All necessary corporate action and proceedings have been taken to effect
the valid transfer of the MindfulEye Shares to the Rabatco as contemplated
under the Agreement.
The opinion expressed is subject to the qualification that enforceability of the
Agreement may be limited by applicable bankruptcy, insolvency or other laws
affecting creditors' rights generally, and that equitable remedies such as the
remedies of specific performance or injunction are in the discretion of the
court from which they are sought.
Yours truly,
o
Per:
o
-2-
SCHEDULE B
Rabatco Solicitor Opinion
(letterhead of solicitors for Rabatco)
o, 2000
o
o
Attention: o
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement") made effective as of the o day
of o, o, between Xxx Xxxxxx, Xxxxxxxx Capital Corp., Xxx Cusolle, Xxx
Xxxxxxxx, Xxxxxx Xxxx and Xxxxx Xxxxxxx (the "Shareholders"),
XxxxxxxXxx.xxx Systems Inc. ("MindfulEye"), and Rabatco Inc. ("Rabatco")
We are the solicitors for Rabatco. We provide this opinion pursuant to
subparagraphs o and o of the Agreement. We have acted as counsel for Rabatco in
connection with the negotiation, execution and completion of the Agreement.
We have considered such questions of law and examined such statutes and
regulations, corporate records, certificates and other documents and have made
such other examinations, searches and investigations as we have considered
necessary for the purpose of the opinion hereinafter expressed. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as certified or as
photocopies.
Based on and subject to the foregoing, we are of the opinion that:
1. Rabatco is a company duly incorporated and validly existing under the laws
of the State of Nevada. Rabatco is in good standing with respect to the
filing of annual reports required by the Nevada Secretary of State.
2. Rabatco has all requisite corporate power and authority to enter into and
to perform its obligations under the Agreement.
3. All necessary steps and corporate action and proceedings have been taken to
authorize the execution and delivery of the Agreement by Rabatco.
4. To the best of our knowledge, neither the execution and delivery of, nor
the performance of its obligations under the Agreement by Rabatco will
conflict with or constitute a breach of or default under the constating
documents of Rabatco or any commitment, agreement or other instrument to
which Rabatco is a party or by which it is bound.
5. As at the Effective Date of the Agreement, the authorized capital of
Rabatco consisted of 100,000,000 common shares with a par value of $0.001.
6. All necessary steps and corporate action and proceedings have been taken to
effect the valid issuance of the Rabatco Shares to the Shareholder as
contemplated under the Agreement, and the Rabatco Shares have been validly
issued as fully paid and non-assessable.
The opinion expressed is subject to the qualification that enforceability of the
Agreement may be limited by applicable bankruptcy, insolvency or other laws
affecting creditors' rights generally, and that equitable remedies such as the
remedies of specific performance or injunction are in the discretion of the
court from which they are sought.
Yours truly,
o
Per:
o
-2-
SCHEDULE C
MindfulEye Assets
All rights, title and interest in and to all tangible and intangible property
associated with all business (the "Business") carried on by MindfulEye including
any business carried on in association with any or all of the internet domain
names "XxxxxxxXxx.xxx", "XxxxxxxxXxx.xxx", "XxxxxxxxXxxxx.xxx", XxxxxXxxxx.xxx",
"XxxxxxXxxxx.xxx" and "XxxxXxxxx.xxx" (the "Domain Names"), and all related
internet website developments (collectively, the "Websites"), including without
limitation:
(i) the contractual right to maintain registration of the Domain Names
with InterNIC (Network Solutions Inc.);
(ii) all URL's associated with the Domain Names or the Websites;
(iii) all databases, books and records relating to the Business including,
without limitation, all recorded information relating to customers of
the Business, and advertisers on and visitors to the Websites;
(iv) any existing patent rights and copyright in graphics and text
displayed at the Websites and in computer software relating to the
Websites or used in the Business;
(v) all trade-xxxx and trade name rights that MindfulEye may have anywhere
in the world in respect of the Business, the Websites or the Domain
Names;
(vi) all goodwill associated with the Business, the Websites or the Domain
Names;
(vii) all contracts, leases, licenses, permits credits, rights, accounts
receivable, cash and prepaid expenses;
(viii) all furniture and fixtures used in the Business; and
(ix) all inventory and equipment associated with the Business, including:
Hardware Serial Number (if applicable)
-------- -----------------------------
3x HP Surestore DAT 24G Ext. Tape GB21085971
2x 3 COM 10/100 PC Card
3 COM Etherlink III TP
ACER 8 Port 10 BASE-T hub
5x System Celeron 466A MHz 128k 814574
814575
814576
814644
814583
System Celeron 400A 128K 814663
2x System Pentium III 450 512K 814573
814795
2x System Pentium III 500 512K 814990
814588
Pentium III 500 MHz CPU 512k
IBM Netfinity server NF3500M10
6x ACER 10/100 PCI Network Card
Iomega Zip Drive Internal
HP LaserJet 1100 USLF001141
IBM Ultrastar 18 GB
ASUS 40x CDROM drive XXXX
Sony CRX120E CDR-W drive
2x Sound Blaster 128 PCI sound
VAIO Notebook slim PII
1 NB Panasonic CF47 PIII 9FMTA01897
2x 3COM Palm Pilots
2 OmniSky modems
Software Serial number (if applicable)
-------- -----------------------------
M/S Windows 98 OEM SE Edition
MSDN Universal 6.0 W9X/NT CD
Trademarks
----------
Have research and applied for the following trademarks:
1. Moodindex
2. MindfulEye
Trademark lawyer:
Xxxxx X. Xxxxx
Xxxx Xxxxx Green & Mutala
480, The Station
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Trademark researcher:
IntelPro - Xxxxxxxx and Xxxxxxxx
000 Xxxxx-Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx X0X 0X0
-2-
Domain Names URLs associated with domain names
------------ ---------------------------------
XxxxxxxXxx.xxx xxxx://xxx.XxxxxxxXxx.xxx
XxxxxxxxXxx.xxx xxxx://xxx.XxxxxxxxXxx.xxx
XxxxxxxxXxxxx.xxx xxxx://xxx.XxxxxxxxXxxxx.xxx
XxxxxXxxxx.xxx xxxx://xxx.XxxxxXxxxx.xxx
XxxxxxXxxxx.xxx xxxx://xxx.XxxxxxXxxxx.xxx
XxxxXxxxx.xxx xxxx://xxx.XxxxXxxxx.xxx
Furniture and Fixtures
----------------------
XxxxxxxXxx.xxx currently owns the following:
1. 4 desks
2. 4 cubicle desks
3. 4 workstation chairs
4. 5 task chairs
5. miscellaneous lighting fixtures (i.e., developer work lamps)
-3-
SCHEDULE D
MindfulEye Financial Statements
-4-
SCHEDULE E
MindfulEye Directors, Officers, Employees, Contractors and Consultants
-5-
SCHEDULE F
MindfulEye Material Contracts
Contracting Party Terms of Contract
----------------- -----------------
SDM Realty Advisors Ltd. 5 yr. Rental agreement for new office
space at 300, 000 Xxxxxxx Xxxxxx
(Marine Building).
Xxxx Xxxx, Programmer
Interactive Tools
000 - 0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx Xxxxxx, Office Planner
Integro Design
000 - 0000 Xxx Xxxxxx
Xxxxxxxxx XX X0X 0X0
-6-
SCHEDULE G
Rabatco Financial Statements
-7-
SCHEDULE H
Rabatco Material Contracts, Bank Accounts and Investments
Material Contracts:
NIL
Bank Accounts:
Account No. 468 4677 (US$); and
Account No. 179 8506 (CDN$),
both at Bank of Montreal
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Investments:
NIL
-8-
SCHEDULE I
Release
THIS RELEASE ("Release") is being executed and delivered as of o, by and on
behalf of o (the "Releasor") to and in favour of, and for the benefit of,
XxxxxxxXxx.xxx Systems Inc. ("MindfulEye") at the request of Rabatco Inc.
("Rabatco").
WHEREAS the Releasor, the Releasee, Rabatco and others entered into a Share
Exchange Agreement dated o (the "Agreement") and as a condition to the
completion of the transactions contemplated by the Agreement, the Releasor
agreed to execute and deliver this Release to and in favour of MindfulEye;
NOW THEREFORE THIS RELEASE WITNESSES that in order to induce MindfulEye and
Rabatco to consummate the transactions contemplated by the Agreement, and for
other valuable consideration (the receipt and sufficiency of which are hereby
acknowledged by the Releasor), the Releasor hereby covenants and agrees as
follows:
1. Definitions.
1.1 The term "Associated Parties," when used herein with respect to a Releasor,
shall mean and include: (i) the Releasor's predecessors, successors,
executors, administrators, heirs and estate; (ii) the Releasor's past,
present and future assigns, agents and representatives; (iii) each entity
that the Releasor has the power to bind (by the Releasor's acts or
signature) or over which the Releasor directly or indirectly exercises
control; and (iv) each entity of which the Releasor owns, directly or
indirectly, at least 10% of the outstanding equity, beneficial,
proprietary, ownership or voting interests.
1.2 The term "Releasee" shall mean and include: (i) MindfulEye; (ii) each of
any direct and indirect subsidiaries of MindfulEye; (iii) each other
affiliate of MindfulEye; and (iv) the successors and past, present and
future assigns, directors, officers, employees, agents, attorneys and
representatives of the respective entities identified or otherwise referred
to in clauses "(i)" through "(iv)" of this sentence.
1.3 The term "Claims" shall mean and include all past, present and future
disputes, claims, controversies, demands, rights, obligations, liabilities,
actions and causes of action of every kind and nature, including: (i) any
unknown, unsuspected or undisclosed claim; (ii) any claim or right that may
be asserted or exercised by the Releasor in the Releasor's capacity as a
stockholder, director, officer or employee of the Releasor or in any other
capacity; and (iii) any claim, right or cause of action based upon any
breach of any express, implied, oral or written contract or agreement.
1.4 The term "Released Claims" shall mean and include each and every Claim that
(i) the Releasor or any Associated Party of the Releasor may have had in
the past or may now or in the future have against any of the Releasees and
(ii) has arisen directly or indirectly out of, or relates directly or
indirectly to, any circumstance, agreement, activity, action, omission,
event or matter occurring or existing on or prior to the date of this
Release excluding such Releasor's rights, if any, under the Agreement.
2. Release.
2.1 The Releasor, on the Releasor's own behalf and for each of the Releasor's
Associated Parties, hereby generally, irrevocably, unconditionally and
completely releases and forever discharges each of the Releasees from, and
hereby irrevocably, unconditionally and completely waives and relinquishes,
each of the Released Claims.
3. Representations and Warranties.
3.1 The Releasor represents and warrants that:
(i) the Releasor has not assigned, transferred, conveyed or otherwise
disposed of any Claim against any of the Releasees, or any direct
or indirect interest in any such Claim, in whole or in part;
(ii) to the best of the Releasor's knowledge, no other person or
entity has any interest in any of the Released Claims;
(iii) no Associated Party of the Releasor has or had any Claim against
any of the Releasees;
(iv) no Associated Party of such Releasor will in the future have any
Claim against any of the Releasees that arises directly or
indirectly from or relates directly or indirectly to any
circumstance, agreement, activity, action, omission, event or
matter occurring or existing on or before the date of this
Release;
(v) this Release has been duly and validly executed and delivered by
the Releasor;
(vi) this Release is a valid and binding obligation of the Releasor
and the Releasor's Associated Parties, and is enforceable against
the Releasor and each of the Releasor's Associated Parties in
accordance with its terms; and
(vii) there is no action, suit, proceeding, dispute, litigation, claim,
complaint or investigation by or before any court, tribunal,
governmental body, governmental agency or arbitrator pending or,
to the best of the knowledge of the Releasor, threatened against
the Releasor or any of the Releasor's Associated Parties that
challenges or would challenge the execution and delivery of this
Release or the taking of any of the actions required to be taken
by the Releasor under this Release.
4. Indemnification.
4.1 Without in any way limiting any of the rights or remedies otherwise
available to the Releasee, the Releasor shall indemnify and hold
harmless the Releasee against and from any loss, damage, injury, harm,
detriment, lost opportunity, liability, exposure, claim, demand,
settlement, judgment, award, fine, penalty, tax, fee, charge or expense
(including attorneys' fees) that is directly or indirectly suffered or
incurred at any time by the Releasee, or to which the Releasee
otherwise becomes subject at any time, and that directly or indirectly
relates to or arises out of or by virtue of (a) any failure on the part
of the Releasor to observe, perform or abide by, or any other breach
of, any restriction, covenant, obligation, representation, warranty or
other provision contained herein; or (b) the assertion or purported
assertion of any of the Released Claims by the Releasor or any of the
Releasor's Associated Parties.
-2-
5. Miscellaneous.
5.1 This Release sets forth the entire understanding of the parties relating to
the subject matter hereof and supersedes all prior agreements and
understandings among or between the Releasor and any of the Releasees
relating to the subject matter hereof.
5.2 If any provision of this Release or any part of any such provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction,
then (i) such provision or part thereof shall, with respect to such
circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (ii) the invalidity or unenforceability of such provision or part
thereof under such circumstances and in such jurisdiction shall not affect
the validity or enforceability of such provision or part thereof under any
other circumstances or in any other jurisdiction, and (iii) such invalidity
or enforceability of such provision or part thereof shall not affect the
validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Release. Each
provision of this Release is separable from every other provision of this
Release, and each part of each provision of this Release is separable from
every other part of such provision.
5.3 This Release shall be construed in accordance with, and governed in all
respects by, the laws of the Province of British Columbia and federal laws
of Canada applicable therein.
5.4 Whenever required by the context, the singular number shall include the
plural, and vice versa; the masculine gender shall include the feminine and
neuter genders; and the neuter gender shall include the masculine and
feminine genders.
IN WITNESS WHEREOF, the Releasor has caused this Release to be executed as of
the date first above written.
---------------------------------
3-
SCHEDULE J
Certificate of Confirmation
Pursuant to subparagraph o of the Share Exchange Agreement made effective as of
the o day of o, o (the "Agreement") between Xxx Xxxxxx, Xxxxxxxx Capital Corp.,
Xxx Cusolle, Xxx Xxxxxxxx, Xxxxxx Xxxx and Xxxxx Xxxxxxx, XxxxxxxXxx.xxx Systems
Inc. and Rabatco Inc. ("Rabatco"), the undersigned hereby confirms to Rabatco
that the representations and warranties of the undersigned contained in the
Agreement or contained in any certificates or documents delivered by the
undersigned pursuant to the Agreement are true and correct in every respect as
of the Time of Closing of the Agreement being o o'clock a.m. local time in
Vancouver, B.C. on the o, 2000.
Dated at o, this o, o.
-------------------------------------
o
SCHEDULE K
Certificate of Confirmation
Pursuant to subparagraph o of the Share Exchange Agreement made effective as of
the o day of o, o (the "Agreement") between Xxx Xxxxxx, Xxxxxxxx Capital Corp.,
Xxx Cusolle, Xxx Xxxxxxxx, Xxxxxx Xxxx and Xxxxx Xxxxxxx, XxxxxxxXxx.xxx Systems
Inc. (collectively the "MindfulEye Group") and Rabatco Inc., the undersigned
hereby confirms to the MindfulEye Group that the representations and warranties
of Rabatco contained in the Agreement or contained in any certificates or
documents delivered by Rabatco pursuant to the Agreement are true and correct in
every respect as of the Time of Closing of the Agreement being o o'clock a.m.
local time in Vancouver, B.C. on the o, 2000.
Dated at o, this o, o.
Rabatco Inc.
Per:
-------------------------------------
o, Director
SCHEDULE L
XXXXXXXXXX.XXX SYSTEMS INC.
0000 - 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X., X0X 0X0
_______, 2000
To: o
Re: Employment Agreement
This Agreement contains the terms and conditions of your employment with
XxxxxxxXxx.xxx Systems Inc. (the "Company").
You will be employed for a term (the "Term") of two years commencing on _____,
2000, unless your employment is terminated or the Term is extended in accordance
with the provisions of this Agreement.
1. Definitions
In this Agreement:
(a) "Affiliate" has the same meaning as in the British Columbia Company
Act or any successor legislation, as amended from time to time.
(b) "Agreement" means this letter agreement and schedules attached to this
letter agreement, as amended or supplemented from time to time.
(c) "Board" means the board of directors of the Company.
(d) "Business of the Company" means the business of collecting, analyzing
and reporting on news and public opinion, through operation of
web-sites on the Internet, or otherwise.
(e) "Cause" includes:
(i) any wilful failure by you in the performance of any of your
duties under this Agreement;
(ii) your conviction of a crime (indictable level or penalized by
incarceration or a lesser crime involving moral turpitude),
or any act involving money or other property involving the
Company or any other member of the Group that would
constitute a crime in the jurisdiction involved;
(iii) any act of fraud, misappropriation, dishonesty, embezzlement
or similar conduct against the Company or an Affiliate or
any customer of the Company or an Affiliate;
(iv) the use of illegal drugs or the habitual and disabling use
of alcohol or drugs;
(v) any threatened or actual attempt by you to secure any
personal profit in connection with the Business of the
Company or the corporate opportunities of any member of the
Group except as may be expressly approved in writing in
advance by the Company, in its discretion;
(vi) any act which is materially injurious to the Business of the
Company; or
(vii) your failure to devote adequate time to the Business of the
Company, or conduct by you amounting to insubordination or
inattention to, or substandard performance of your duties
and responsibilities under this Agreement, or any other
material breach of any of the terms of this Agreement, which
remains uncured after the expiration of ten days following
the delivery of written notice of such failure or conduct to
you by the Company.
(f) "Company" means XxxxxxxXxx.xxx Systems Inc., a company formed under
the laws of British Columbia.
(g) "Competitive Business" means any business or enterprise that is in
competition with the Business of the Company.
(h) "Confidential Information" means all confidential or proprietary
facts, data, techniques and other information relating to the Business
of the Company which may before or after the date of this Agreement be
disclosed to you by the Company or by any other member of the Group or
which may otherwise come within your knowledge or which may be
developed by you in the course of your employment or from any other
Confidential Information.
(i) "Group" means the Company, Rabatco Inc. ("Rabatco") and their
Affiliates.
(j) "Intellectual Property Rights" means all rights in respect of
intellectual property including, without limitation, all patent,
industrial design, copyright, integrated circuit topography, know-how,
trade secret, privacy and trade-xxxx rights, to the extent those
rights may subsist anywhere in the universe.
(k) "Permanent Disability" occurs if (i) you are unable to perform your
duties under this Agreement for a period of 60 consecutive days as
certified by a physician chosen by the Company and acceptable to you,
acting reasonably, or (ii) you become entitled to disability
retirement benefits under the Canada Pension Plan or recover benefits
under any long term disability plan or policy maintained by the
Company.
(l) "Person" means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation with
or without share capital, unincorporated association, trust, trustee,
executor, administrator or other legal personal representative,
regulatory body or agency, government or governmental agency or entity
however designated or constituted.
-2-
2. Employment
The terms of your employment will be as follows:
(a) Position and Responsibilities: You will be employed by the Company in
the position set out on Schedule A to this Agreement. You will perform
and fulfil the duties and responsibilities set out on Schedule A, or
that the Board may prescribe from time to time and that are reasonably
consistent with your position.
(b) Scope of Duties: During your employment, you will devote the whole of
your time, attention and abilities during normal business hours to the
duties hereby granted and accepted and you will give the Company the
full benefit of your knowledge, expertise, technical skill and
ingenuity.
(c) Salary: During the term of your employment, you will receive an annual
gross salary in the amount set out on Schedule A to this Agreement and
payable in accordance with the Company's standard salary payment
schedule. You will also receive such other benefits as may be
specified on Schedule A. Payment of your Salary will be subject to
source deductions and other deductions required to be deducted and
remitted under applicable provincial or federal laws of Canada or
Company policy. Other benefits will be subject to applicable laws,
which may include a requirement for regulatory approval.
(d) Vacation Entitlement: You will receive paid vacation in the amount set
out on Schedule A to this Agreement. Your vacation must be taken in
accordance with the Company's vacation policy in effect from time to
time.
(e) Medical, Insurance and Other Benefits: You will be entitled to
participate in the Company's standard benefit program which includes
medical, dental, life and disability insurance as are now or may
hereafter be established by the Company for the benefit of its
employees, as specified in Schedule A.
(f) Extension of Term: Unless the Company provides you with written notice
that the Company does not wish to extend the Term of this Agreement
for an additional period, the Term of this Agreement will, subject to
your consent, be deemed to be extended for an additional one year
period on the same terms and conditions as provided for under this
Agreement, unless otherwise agreed to in writing.
3. Assignment of Interest in Inventions
As consideration for your employment with the Company, you covenant and agree as
follows:
(a) Disclosure: You will make prompt and full disclosure to the Company of
any discovery, invention, development, production, process or
improvement that may relate to the Business of the Company and that is
conceived, made, improved upon or participated in by you, solely or
jointly, in the course of or relating to or resulting from your
employment with the Company or with any other member of the Group (the
"Inventions").
-3-
(b) Assignment: Your acceptance of the terms of this Agreement constitutes
your absolute, unconditional and irrevocable assignment and transfer
of, and agreement to assign and transfer, all past, present and future
right, title, benefit and interest in and to all Intellectual Property
Rights in respect of the Inventions. You hereby waive in favour of the
Company all claims of any nature whatsoever that you now or hereafter
may have for infringement of any Intellectual Property Rights for the
Inventions so assigned to the Company. To the extent that copyright
may subsist in the Inventions, you hereby waive all past, present and
future moral rights you may have. You agree that the Company will hold
all Intellectual Property Rights in respect of the Inventions for the
exclusive benefit of the Company and you agree not to claim or apply
for registration or challenge the Company's registration of, any such
Intellectual Property Rights.
(c) Intellectual Property Protection: By your acceptance you irrevocably
agree the Inventions and all related Intellectual Property Rights will
be the absolute and exclusive property of the Company. The Company may
apply for patent, copyright or other intellectual property protection
in the Company's name or, where such procedure is proper, in your
name, anywhere in the world. You will, at the Company's request,
execute all documents and do all such acts and things considered
necessary by the Company to obtain, confirm or enforce any
Intellectual Property Rights in respect of the Inventions. If the
Company requires but is unable to secure your signature for any such
purpose in a timely manner, you hereby irrevocably designate and
appoint the Company and any duly authorized officer or agent of the
Company as your agent and attorney, to act for you and in your behalf
and stead to execute any such documents and to do all other lawfully
permitted acts to carry out the intent of this provision, with the
same legal force and effect as if executed or done by you.
4. Obligations of Employment
You further covenant and agree as follows:
(a) Performance and Duty to the Company: Throughout your employment you
will well and faithfully serve the Company and use all reasonable
endeavours to promote the interests of the Company. You will act
honestly, in good faith and in the best interests of the Company. You
will adhere to all applicable policies of the Company.
(b) Business of the Company: You will not, during your employment with the
Company, engage in any business, enterprise or activity that is
contrary to or detracts from the due performance of the Business of
the Company.
(c) Confidentiality: You will retain all Confidential Information
developed, utilized or received by the Company and each other member
of the Group in the strictest confidence and will not disclose or
permit the disclosure of Confidential Information in any manner other
than in the course of your employment with and for the benefit of the
Company or as required by law or a regulatory authority having
jurisdiction. You will not use Confidential Information for your own
personal benefit or permit it to be used for the benefit of any Person
other than the Company, either during your employment with the Company
or thereafter. You will take all reasonable precautions to prevent any
Person from having unauthorized access to Confidential Information or
use of it. In particular, you will not copy, modify or part with any
Confidential Information, in whole or in part,
-4-
except with the written approval of the Company or as may be required
to carry out your duties under this Agreement. All copies of
Confidential Information, and all documents and electronic or other
records which now or hereafter may contain Confidential Information,
are and will remain the exclusive and absolute property of the
Company.
(d) Exceptions: Any obligations specified in subsection 4(c) will not
apply to any information:
(i) presently in the public domain;
(ii) that becomes part of the public domain through no fault of
your own; or
(iii) the disclosure of which is required by applicable laws or
the order of a court or regulatory authority having
jurisdiction.
(e) Restrictions: This Agreement has been entered into in the course of an
arm's length transaction whereby Rabatco acquired all the issued and
outstanding shares of the Company from the shareholders of Rabatco
including you, in exchange for a certain number of shares in the
capital of Rabatco. To ensure that the Group receives and keeps the
goodwill associated with the business of Company, you agree that at
all times during your employment with the Company and for a period of
twenty-four months after the termination of your employment, you will
not, except with the prior written consent of the Company, which
consent may be withheld in the Company's sole discretion:
(i) either individually or in conjunction with any Person, as
principal, agent, director, officer, employee, investor or
in any other manner whatsoever, directly or indirectly,
engage in or become financially interested in a Competitive
Business in North America;
(ii) either directly or indirectly, on your own behalf or on
behalf of others, solicit, divert or appropriate or attempt
to solicit, divert or appropriate to any Competitive
Business, any customer or actively sought prospective
customer of the Company or any customer with whom the
Company or any other member of the Group has had dealings
relating to the Business of the Company, or with whom you
have dealt, or with whom you have supervised negotiations or
business relations, or about whom you have acquired
Confidential Information in the course of your employment by
the Company; nor
(iii) either directly or indirectly, on your own behalf or on
behalf of others, solicit, divert or hire away, or attempt
to solicit, divert, or hire away, any independent contractor
or any person employed by the Company or any other member of
the Group or persuade or attempt to persuade any such
individual to terminate his or her employment with the
Company.
(f) Tolling: You agree that if you breach any of the covenants contained
in subsection 4(e), the running of the period of the restrictions
described in the covenant breached will be tolled during the
continuation of any breach by you, and the running of period of the
restriction will begin again only upon your compliance with the terms
of the covenant breached.
-5-
(g) Acknowledgement: You represent and warrant to the Company that you are
not subject to any agreement with any other entity that would prevent
you from getting involved or participating in the Business of the
Company or from soliciting any personnel or customers of such entity
on behalf of another business.
(h) No Damaging Conduct: You will not directly or indirectly impair or
seek to impair the reputation of the Company or any other member of
the Group, nor any relationships that the Company or any other member
of the Group has with its employees, customers, suppliers, agents or
other parties with which the Company or any other member of the Group
does business or has contractual relations, either during or after
your employment by the Company.
(i) No Personal Benefit: You will not receive or accept for your own
benefit, either directly or indirectly, any commission, rebate,
discount, gratuity or profit from any Person having or proposing to
have one or more business transactions with the Company or any other
member of the Group, without the prior written approval of the Board,
in its discretion.
(j) Customer Contacts: During your employment you will communicate and
channel to the Company all knowledge, business and customer contacts
and any other information that could concern or be in any way
beneficial to the Business of the Company. Any such information
communicated to the Company as aforesaid will be and remain the
property of the Company notwithstanding the subsequent termination of
your employment.
(k) Return of Company Property: Upon termination of your employment, you
will promptly return to the Company all Company property including all
written information, tapes, discs or memory devices and copies
thereof, and any other material on any medium in your possession or
control pertaining to the Business of the Company, without retaining
any copies or records of any Confidential Information whatsoever. You
will also return any keys, pass cards, identification cards or other
property belonging to the Company.
5. Termination
(a) Your employment may only be terminated prior to expiry of the Term as
follows:
(i) Mutual Agreement: Your employment may be terminated upon the
mutual written agreement by the parties.
(ii) Permanent Disability: Your employment will terminate in the
event of your Permanent Disability.
(iii) With Cause: The Company may terminate your employment for
Cause, immediately after delivery by the Company to you of a
notice of termination of your employment for Cause, in which
case you will not be entitled to receive any further
compensation (except for compensation, if any, accrued under
this Agreement up to the date of termination of your
employment and unpaid at the date of such
-6-
termination), severance pay, notice, payment in lieu of
notice or damages of any kind and you hereby release all
claims and entitlements thereto, without limitation.
(iv) Resignation: If for any reason you should wish to leave the
Company you will provide the Company sixty days' prior
written notice of your intention.
(v) Without Cause: The Company may terminate your employment at
any time without Cause by providing you with the greater of
the following:
(A) three months' written notice or payment in lieu of
notice; or
(B) the minimum notice or payment in lieu of notice
prescribed by the Employment Standards Act (British
Columbia) or any successor legislation form time to
time.
You will not be entitled to receive any further severance
pay, notice, payment in lieu of notice or damages of any
kind and you will not be entitled to receive any further
compensation (except for compensation, if any, accrued under
this Agreement up to the date of termination of your
employment and unpaid at the date of such termination) and
you hereby release all claims and entitlements thereto
including, without limitation, any claims and entitlements
under the Employment Standards Act (British Columbia).
Payments in lieu of notice will be subject to all source
deductions and other deductions required to be deducted and
remitted under applicable provincial or federal laws of
Canada or Company policy.
6. Agreement Voluntary and Equitable
You acknowledge that you have had the opportunity to obtain independent legal
advice regarding this Agreement, that you have carefully considered and
understand the terms of this Agreement and consider them to be mutually fair and
equitable, and that you have executed this Agreement voluntarily and of your own
free will.
7. Irreparable Harm
You acknowledge and agree that any breach of any provision of section 3 or
section 4 of this Agreement by you will cause irreparable harm to the Company
and in addition to all of the remedies available to the Company by law, the
Company will be entitled to equitable relief including without limitation,
injunctive relief to ensure your compliance with section 3 and section 4 of this
Agreement.
8. Your Claims
The existence of any claim, demand, action or cause of action by you against the
Company or any other member of the Group, whether based on this Agreement or
otherwise, will not constitute a defense to the enforcement by the Company of
its rights under this Agreement.
9. Prior Relationship
You absolutely, unconditionally and irrevocably waive and release any claim that
you may have had up to the date of this Agreement based on your prior
relationship with the Company, if any, as a director, officer, employee, or
independent contractor, including without limitation any claim for any employee
benefits, holiday pay, termination notice or severance pay in lieu of notice,
and you agree not to advance
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or permit any such claim to be advanced and will indemnify and save the Company
and Group harmless in respect of any such claim or any other liabilities or
costs that the Company or Group may suffer as a result of any court action,
decision, judgement or ruling or any ruling by a governmental authority having
jurisdiction, in respect of your prior relationship with the Company.
10. Assignment and Enurement
You may not assign this Agreement, any part of this Agreement or any of your
rights under this Agreement without the prior written consent of the Company,
which may be withheld in its discretion. This Agreement enures to the benefit of
and is binding upon you and the Company and your respective heirs, executors,
administrators, successors and permitted assigns.
11. Severability
If any provision or portion of this Agreement is determined to be invalid or
unenforceable for any reason, then that provision or portion will be severed
from this Agreement. The rest of this Agreement will remain in full force and
effect.
12. Entire Agreement
This Agreement contains the whole agreement between you and the Company with
respect to your employment by the Company, and there are no representations,
warranties, collateral terms or conditions, express or implied, other than as
set forth in this Agreement. This Agreement supersedes any written or oral
agreement or understanding between you and the Company. No change or
modification of this Agreement will be valid unless it is in writing and
initialled by all parties.
13. Notice
Any notice required or permitted to be given hereunder must be in writing and
will be sufficiently given or made if delivered or sent by registered mail to
the address of the parties set out on page 1 hereof. Any notice so given will be
deemed to have been given and to have been received on the day of delivery if it
is a business day and otherwise on the next succeeding business day or, if
mailed, on the third business day following the mailing thereof (excluding each
day during which there exists any interruption of postal services due to strike,
lockout or other cause). Addresses for notice may be changed by giving notice in
accordance with this section.
14. Non-waiver
No failure or delay by you or the Company in exercising any power or right under
this Agreement will operate as a waiver of such power or right. Any consent or
waiver by you or by the Company to any breach or default under this Agreement
will be effective only in the specific instance and for the specific purpose for
which it was given.
15. Survival of Terms
Except for subsections 2(a) to 2(e), the provisions of this Agreement will
survive the termination of your employment.
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16. Further Assistance
The parties will execute and deliver any documents and perform any acts
necessary to carry out the intent of this Agreement.
17. Time
Time is of the essence of this Agreement.
18. Governing Laws
This Agreement will be construed in accordance with and governed by the laws of
British Columbia and the laws of Canada applicable in British Columbia.
19. Counterparts
This Agreement may be executed in two or more counterparts, each of which will
be deemed to be an original and all of which will constitute one Agreement.
XXXXXXXXXX.XXX SYSTEMS INC.
By: -------------------------------
Name: ------------------------------
Title: -----------------------------
I acknowledge and accept the terms and conditions of my employment with the
Company as set out above.
DATED this ________ day of ______, 2000.
------------------------------------
o
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SCHEDULE A
Employee's Name o
Commencement Date: o
Position: o
Duties & Responsibilities o
Salary: o
Stock Options: o
Paid Vacation: o
Other Benefits (if any) o
XXXXXXXXXX.XXX SYSTEMS INC.
By: -------------------------------
Name: ------------------------------
Title: -----------------------------
I acknowledge and accept the terms and conditions of my employment with the
Company as set out above.
DATED this ________ day of ______, 2000.
------------------------------------
o
